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Philadelphians Dare to Question WHYY Executive Salaries

Staff, a newspaper columnist, and a local magazine take on the CEO of the local public broadcasting outlet for excessive compensation and poor performance.

Back in August, we talked about the quarter-million-dollar salary of Matt A. Peskin, head of the organization that sponsors National Night Out, and his defiant stance against people (including Sen. Arlen Specter) who questioned it. Philadelphia Inquirer columnist Karen Heller used the story to launch an attack on another well compensated CEO, William Marrazzo of the public broadcasting outlet WHYY (EIN 23-1438083 Form 990).

For several years, Mr. Marrazzo has topped the salary list of public broadcasting CEOs, with direct compensation of $420,786 and contributions to benefit plans of $211,117, which includes a nonrecurring payment of $154,867 for retroactive tax liability on pension benefits.

The column by Mr. Heller was followed by a letter from anonymous staff members, published on the Philadephia Citipaper blog, with complaints about Mr. Marrazzo's pay and the lack of local programming at the station (among other things). The Citipaper provides some helpful context by referring back to a labor dispute at the station last year that also put the CEO's pay in the spotlight.

The Philadelphia Magazine (reporter Steve Volk) then covered the story, with more details on how Mr. Marrazzo reached the top position at the station without having prior experience in broadcasting. This reported even was granted an interview with Mr. Marrazzo that was marred by some heavy handed attempts to intimidate the reporter:

My own experience with 'HYY was often troubling. Along the way, the
company's publicity flacks called my editor to talk when they didn't
like the questions I was asking; the director of marketing creepily
recited for me a long list of all the people she knew I had called; and
two 'HYY publicists took notes during the majority of my interviews
with 'HYY staff, a policy even extended to [radio call-in host Marty] Moss-Coane, a woman who is
otherwise trusted to sit in front of an open microphone for two hours a
day. I was also informed in an e-mail that WHYY could potentially find,
fire and even prosecute the person responsible for faxing me a
not-so-sensitive financial document - a budget sheet, essentially -
that didn't even warrant inclusion in this story.

The Form 990 for WHYY confirms that Mr. Marrazzo's pay package is more than double that of other staff, including COO Bruce Flamm ($187,306/$18,408) and on-air personality Terry Gross, listed in schedule A as an executive producer ($180,907/$16,942).

But even more disturbing to me is the absence of any financial officer in the compensation rolls. It appears that WHYY paid a company called Your Part Time Controller $83,453 in 2006 to keep the books. This might be an appropriate approach for a smaller scale operation, but not for a $30 million a year operation with 190 employees.

Then on the board, we see that the board secretary is M. Walter D'Alessio, the real estate developer who was formerly the chair of the Independence Seaport Museum, another charity with an out-of-control executive director (who pleaded guilty of defrauding the museum of $1.5 million). We have already questioned the ability of Mr. D'Alessio to provide oversight for charity organizations.

Public broadcasting provides the perfect counter for the absurd claim
that executive salaries at charities need to be based on the standards of the
private sector, when nationally known on-air talent in public broadcasting (like Terry Gross) earn in the low six figures. These high CEO pay packages are a measure of the inability of in-bred charity boards to implement reasonable and sane standards of compensation (the kind that human resources departments routinely establish) and to engage in competent salary negotiations.

And it is good to see that some in the local press (at least) are now willing to take on the issue of CEO compensation in nonprofit organizations.